Why doesn't the Find Updates function work?
From Joomla! Documentation
A new Update feature was introduced with Joomla version 1.6 that allows you to easily check if updates are available either for Joomla or for an installed extension. You do this by clicking on
Find Updates in the
Extension Manager: Updates (Extensions → Extension Manager → Update). When you do this, if one of the update servers is not available (for example, it is down or the update URL is wrong for the extension), you see an error message and the row for this extension is automatically disabled in the jos_update_sites table. This is done so that you don't see the same error message each time you do the Find Updates command.
In version 1.6.2 and earlier, the database row was disabled, but there was no way for the row to be re-enabled without manually editing the database.
Starting with Joomla version 1.6.3, this has been changed to that, when you press the Purge Cache toolbar button, it automatically re-enables any disabled rows in the jos_update_sites table. Then, assuming the update server is back on line, the Find Updates command will now succeed.